NXP Semiconductors seeks state incentives for $291M Austin project – Austin Business Journal – The Business Journals
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The Netherlands-based chipmaker NXP Semiconductors NV is now seeking state tax incentives as it plans to invest nearly $300 million into its two Austin manufacturing sites.
UPDATE: Austin City Council nominated NXP USA Inc. for the state’s Texas Enterprise Zone program during its Nov. 30 meeting. The recommendation, approved on the Council’s consent agenda, was made in the form of two resolutions for the manufacturer’s Austin facilities at 3949 Ed Bluestein Blvd. and 6501 W. William Cannon Drive. The company will still need to submit an application to the state for final consideration.
NXP Semiconductors NV is seeking more than $1 million in tax refunds from the state as the chipmaker plans to invest millions into its Austin facilities.
NXP USA Inc., a subsidiary of the Netherlands-based NXP (Nasdaq: NXPI), is pursuing a nomination from the city of Austin to seek designation under the Texas Enterprise Zone program. The state program would open the door for the company to receive state tax rebates for its upcoming investment into Central Texas’ manufacturing economy.
Austin City Council is set to vote on a resolution nominating NXP for the program during its Nov. 30 meeting.
The request comes a few months after Council authorized a $1 million incentives package for the Dutch company, which aims to invest roughly $291 million to replace production lines at its two Austin factories: at 3949 Ed Bluestein Blvd. in East Austin and at 6501 W. William Cannon Drive, in the Oak Hill neighborhood of Southwest Austin. As part of the improvement plan, the company pledged to create at least 53 jobs with the project. It already employs 2,768 people between the two sites. The city incentives will take the form of rebates on city property taxes.
There had been fears the lines would become obsolete without new investment.
The Texas Enterprise Zone Program is a sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state, provides a state incentive to companies that commit to the creation and/or retention of jobs, as well as economically disadvantaged workforce hiring, according to the state’s website.
If Council nominates NXP for the program, the company would still need to submit an application to the state for final approval.
If approved by the Texas Governor’s Office, the company would be eligible for up to $2,500 per job created or retained, with a total reimbursement of state sales and use tax of up to $1.25 million over 5 years. It’s essential to note that these incentives are provided by the state, and there are no additional city incentives on the table.
NXP’s Austin operation was previously approved for the state program in 2020 alongside SHI International Corp., Pension LLC and Dell Inc.
Other companies that currently have active agreements under the program include Applied Materials Inc., Samsung Austin Semiconductor LLC and Flextronics America LLC.
NXP is also seeking an award from the federal CHIPS Act, which requires local support for the project, and an approval for the state incentives would further strengthen NXP’s application for a CHIPS application.
NXP’s recent deal with the city marked a significant shift in incentives policy. It was the first time Austin has approved a Chapter 380 incentives agreement since 2020. That was when Austin signed a deal with component engineering firm Astute Electronics for a relatively small $1.5 million expansion.
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